Indonesia power and renewable markets long-term outlook 2016
The Indonesian government continues to implement several measures to solve the looming power crisis. The power price reform is on the right track, with PLN implementing monthly power tariffs adjustment for its customers from early 2015. It has resulted in lower electricity subsidies in 2015 and 2016. Presidential regulation no. 4/2016 was released in January 2016 to expedite the land acquisition and permitting processes. The 35 GW power programme progresses slowly. The government's 2019 completion target will not be achieved on time. Power shortages will happen in the next 2-3 years, but the commencement of new gas-fired power plants should help alleviate the problem. Gas' portion in power generation is expected to increase quickly, until coal takes over post 2020. The 2016 power development plan's aspiration to reduce coal's portion is favourable for gas in the long term, but will not change the fuel mix in the short to medium term.